MKS Instruments (MKSI - Free Report) reported fourth-quarter 2020 adjusted earnings of $2.34 per share, which beat the Zacks Consensus Estimate by 15.3% and surged 95% year over year.
Revenues of $660.2 million surpassed the consensus mark by 9.1% and improved 32.1% year over year, driven by buoyant demand for the company’s solutions in the semiconductor market.
Products revenues (86.9% of total revenues) were $573.8 million, up 34.5% from the year-ago quarter. Services revenues (13.1%) increased 18% year over year to $86.4 million.
Quarter Details
Revenues from the semiconductor market (59.5% of total revenues) jumped 44.8% year over year to $392.9 million owing to increased demand, particularly for the Power Solutions business.
Revenues from advanced markets (40.5% of total revenues) were $267.3 million, up 17.1% from the year-ago quarter attributed to recovery in demand trends for Advanced Electronics applications.
Segment-wise, Vacuum and Analysis (62.2% of total revenues) revenues surged 46.8% year over year to $410.8 million.
Light and Motion division revenues (27.6% of total revenues) increased 3.3% year over year to $182.3 million.
Equipment & Solutions segment revenues (10.2% of total revenues) were $67.1 million, up 54.9% year over year.
Operating Details
In the fourth quarter, MKS Instruments’ adjusted gross margin expanded 240 basis points (bps) on a year-over-year basis to 45.7%.
Adjusted EBITDA increased 67.5% year over year to $180.7 million. Adjusted EBITDA margin expanded 580 bps on a year-over-year basis to 27.4%.
Research & development and sales, general & administrative expenses, as a percentage of revenues, declined 150 bps and 250 bps on a year-over-year basis, respectively.
MKS Instruments reported non-GAAP operating income of $163.4 million, up 77.4% year over year. Adjusted operating margin expanded 630 bps on a year-over-year basis to 24.8%.
Balance Sheet
As of Dec 31, 2020, MKS Instruments had cash and short-term investments of $836 million compared with $715.7 million as of Sep 30, 2020.
Secured term-loan principal outstanding as of Dec 31, 2021 was $833 million. The company also had $100 million of incremental borrowing capacity under an asset-based line of credit, subject to certain borrowing base requirements.
Cash flow from operations surged 90.4% year over year to $147.2 million. Free cash flow jumped 110% year over year to $122.2 million.
MKS Instruments paid out dividends worth $11 million during the reported quarter.
Q1 Guidance
For the first quarter of 2021, MKS Instruments anticipates revenues to be $650 million (+/- $25 million). The Zacks Consensus Estimate for revenues is currently pegged at $611.3 million, indicating growth of 14.1% from the figure reported in the year-ago quarter.
Non-GAAP earnings are expected to be $2.16 per share (+/- 20 cents).
The consensus mark for earnings is currently pegged at $2.04 per share, suggesting an increase of 32.4% from the figure reported in the year-ago quarter.
Zacks Rank & Stocks to Consider
Currently, MKS Instruments has a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader technology sector are Entegris, Inc. (ENTG - Free Report) , EMCORE Corporation (EMKR - Free Report) and Brooks Automation, Inc. . All three stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Entegris, EMCORE and Brooks Automation are set to report their quarterly results on Feb 2, 3 and 4 respectively.
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MKS Instruments (MKSI - Free Report) reported fourth-quarter 2020 adjusted earnings of $2.34 per share, which beat the Zacks Consensus Estimate by 15.3% and surged 95% year over year.
Revenues of $660.2 million surpassed the consensus mark by 9.1% and improved 32.1% year over year, driven by buoyant demand for the company’s solutions in the semiconductor market.
Products revenues (86.9% of total revenues) were $573.8 million, up 34.5% from the year-ago quarter. Services revenues (13.1%) increased 18% year over year to $86.4 million.
Quarter Details
Revenues from the semiconductor market (59.5% of total revenues) jumped 44.8% year over year to $392.9 million owing to increased demand, particularly for the Power Solutions business.
Revenues from advanced markets (40.5% of total revenues) were $267.3 million, up 17.1% from the year-ago quarter attributed to recovery in demand trends for Advanced Electronics applications.
Segment-wise, Vacuum and Analysis (62.2% of total revenues) revenues surged 46.8% year over year to $410.8 million.
Light and Motion division revenues (27.6% of total revenues) increased 3.3% year over year to $182.3 million.
Equipment & Solutions segment revenues (10.2% of total revenues) were $67.1 million, up 54.9% year over year.
Operating Details
In the fourth quarter, MKS Instruments’ adjusted gross margin expanded 240 basis points (bps) on a year-over-year basis to 45.7%.
Adjusted EBITDA increased 67.5% year over year to $180.7 million. Adjusted EBITDA margin expanded 580 bps on a year-over-year basis to 27.4%.
Research & development and sales, general & administrative expenses, as a percentage of revenues, declined 150 bps and 250 bps on a year-over-year basis, respectively.
MKS Instruments reported non-GAAP operating income of $163.4 million, up 77.4% year over year. Adjusted operating margin expanded 630 bps on a year-over-year basis to 24.8%.
Balance Sheet
As of Dec 31, 2020, MKS Instruments had cash and short-term investments of $836 million compared with $715.7 million as of Sep 30, 2020.
Secured term-loan principal outstanding as of Dec 31, 2021 was $833 million. The company also had $100 million of incremental borrowing capacity under an asset-based line of credit, subject to certain borrowing base requirements.
Cash flow from operations surged 90.4% year over year to $147.2 million. Free cash flow jumped 110% year over year to $122.2 million.
MKS Instruments paid out dividends worth $11 million during the reported quarter.
Q1 Guidance
For the first quarter of 2021, MKS Instruments anticipates revenues to be $650 million (+/- $25 million). The Zacks Consensus Estimate for revenues is currently pegged at $611.3 million, indicating growth of 14.1% from the figure reported in the year-ago quarter.
Non-GAAP earnings are expected to be $2.16 per share (+/- 20 cents).
The consensus mark for earnings is currently pegged at $2.04 per share, suggesting an increase of 32.4% from the figure reported in the year-ago quarter.
Zacks Rank & Stocks to Consider
Currently, MKS Instruments has a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader technology sector are Entegris, Inc. (ENTG - Free Report) , EMCORE Corporation (EMKR - Free Report) and Brooks Automation, Inc. . All three stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Entegris, EMCORE and Brooks Automation are set to report their quarterly results on Feb 2, 3 and 4 respectively.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by referendums and legislation, this industry is expected to blast from an already robust $17.7 billion in 2019 to a staggering $73.6 billion by 2027. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot stocks we're targeting >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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